Human Capital Investment and Industrial Performance in Nigeria: A GMM Approach

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Dauda, R.O.S.
Odior, E.S.O.
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Unilag Press & Bookshop ltd
This study analyses the likely impact (static and contemporaneous impacts) of human capital investment on industrial performance in Nigeria. Methodologically, the Generalized Method of Moments (GMM) model was modelled to analyse the nature of the framework, where industrial performance proxied by value added to industrial production is presumed to depend upon changes in various indicators of industrial performance with a list of instrumental variables (IV) estimators which were estimated over the period 1981-2011. We find results consistent with other researchers on static and contemporaneous impacts and all the explanatory variables appear to have impacted on industrial productivity and consistent with the overall industrial productivity model both in the short and long run. Specifically, we found out that the public investment on education apart from other control variables in the model is very important in explaining variation in industrial productivity both in the short and long run while, public investment on health plays a less important or insignificant role in variation of industrial productivity in Nigeria. This study recommends and concludes that the Nigerian policy makers (government) should do all it could, to increase its budgetary allocation to human capital development factors in order to boost industrial productivity through the increase in skilled workforce and more policy attention should be given to positive regulation of health policy expenditure and a steady boost in that sector.
Human Capital Investment , Industrial Performance , A GMM Approach
Dauda, R.O.S & Odior, E. S (2016), “Human Capital Investment and Industrial Performance in Nigeria. A GMM Approach” in Nigeria’s Industrial Development, Corporate Governance and Public Policy, Essays in Honour of Michael O. Adejugbe, Department of Economics, University of Lagos, Lagos, Pp, 149 – 180.